T HE N EW D EAL & B LACK T UESDAY Unit 6 – The Great Depression

B OOM T IMES After WWI the US suffered from an economic decline US cut back on government contracts with factories Soldiers came back and there were no more jobs for them President Woodrow Wilson was criticized for the economic drop. President Warren Harding Created more jobs by encouraging wealthy Americans to invest in new businesses. Incentives: Motivating influence or a reward for increased productivity. President Calvin Coolidge Decreased government involvement in business and gave more control to business owners The economy started to get better.

B USINESS B OOM 1920 – 1929: US manufacturing doubled. As jobs and wages increased so did people’s ability to buy more goods. Assembly Line: System that used conveyer belts to move parts and partly assembled cars from one groups of workers to the next. Henry Ford – Wanted to make affordable cars and the assembly line helped – Model T costs $ – Model T costs $290 Allowed people to pay using an “installment plan” Raised workers wages to $5 an hour

S TOCK M ARKET C RASHES Buy On Margin – Purchasing stocks on credit. Stockholders planned to sell their stocks high, pay back the loan with their profit and keep the remaining amount. People assumed that stocks would continue to increase. They never imagined what would happen if the prices of stocks fell. Thursday, October 24 th – After several months of slow decrease in stock prices, panic hits the stock market. Within 3 hours the market lost $11 billion dollars in value. Black Tuesday (Tuesday, October 29 th 1929) – People wanted to sell their stocks, and so few wanted to buy, that stock prices crashed. The United States will not recover from this economic recession for 10 years. Recession: A temporary depression in economic activity or prosperity. Because of the length and severity of the recession we call it – The Great Depression

C AUSES OF G REAT D EPRESSION Historians debate the causes of the Great Depression, below are some of the most popular reasons. Overproduction – Factories continued to produce goods when the majority of consumers already owned these goods. Uneven Distribution of Wealth – In 1929 the wealthiest Americans earned 1/3 of the nation’s total income. While 40% of Americans earned only 1/8 of the nation’s income. Declining World Trade – Europe was still recovering from WWI and could not afford American goods. The US issued high tariffs on European goods to discourage the purchase of non-American products.

P RESIDENT H OOVER Unemployment – The number of people searching for work. President Hoover knew Americans needed help but Hoover felt it was up to private institutions and individuals to help Americans gain employment – not the federal government. Hoover started a few projects around the country to help put people back to work but Americans thought he should do more. Hoovervilles – A collection of huts and shacks, at the edge of a city, housing the unemployed during the 1930s. Bonus Army – A group of WWI veterans who set up a Hooverville outside of Washington, D.C and demanded the government pay them their military bonuses early. 2,000 – 17,000 Men Hoover asked General MacArthur to use US troops to close the Hooverville. Several veterans were killed. 31 st President Herbert Hoover

P RESIDENT R OOSEVELT President Franklin D. Roosevelt – “The only thing to fear is fear itself.” The Hundred Days – Roosevelt called Congress into session to work on programs to help aid economic recovery. The New Deal Fireside Chats – Sunday radio addresses that restored the confidence of Americans. Emergency Banking Relief Act : Approved more government involvement in the banking industry. Encouraged Americans to use banks again.

T HE N EW D EAL 1933 – 25% of the nation’s workforce was unemployed New Deal Programs helped get Americans back to work. Civil Works Administration: (CWA) Employed over 4 million workers repairing roads and airports. Civilian Conservation Corps: (CCC) Gave hundreds of thousands jobs for planting trees and restoring national parks. Tennessee Valley Authority: (TVA) Built dams and generators thus bringing electricity and jobs to people in the Tennessee Valley.

T HE N EW D EAL First Lady Eleanor Roosevelt was concerned that the New Deal Programs were not reaching the younger generations. National Youth Administration: (NYA) This gave part-time work to many youth while also allowing them to stay in school. Social Security (1935) – Created to help those who were “unable to maintain themselves independently through no fault of their own”. Provided some financial security to those who were elderly, disabled, children, and unemployed. First time the national government is taking direct responsibility for the economic situation of Americans. Taxed working Americans and business to help fund Social Security.